Fmr. Shell Oil President: America Loves Oil, Oversupply Will Come Down

By EnergyFOXBusiness

John Hofmeister on oil glut

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John Hofmeister on oil glut

Former Shell Oil President John Hofmeister discusses his outlook for oil production.

Weekly inventory data from the Energy Information Administration showed an unexpected drawdown in U.S. crude oil stockpiles, sending oil and energy stocks higher on the session.

On Wednesday morning, the EIA said inventories fell by 3.41 million barrels last week, while Wall Street had anticipated an increase of 714,000 barrels. Meanwhile, gasoline stockpiles fell by 1.23 million barrels, more than the expected 700,000-barrel decline and distillate inventories slipped by 1.65 million barrels compared to estimates for a one million-barrel draw.

Crude oil prices traded higher on the back of the data’s release as traders sent U.S. benchmark West Texas Intermediate crude prices up nearly 3% to above $45 a barrel. Brent crude prices followed, trading up more than 3.4% to above $47 a barrel.

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WTI Crude Oil Spot Price - 1 Year | FindTheData

Although negative on the session thanks to weakness in retail and entertainment heavyweights, U.S. equities benefitted from the upswing in crude. The energy sector was the biggest S&P 500 gainer on the session, rising 0.5%.

The data from the Department of Energy followed figures from the American Petroleum Institute late Tuesday night, which showed a 3.45 million-barrel jump in stockpiles last week, which was much higher than the 714,000-barrel build that had been anticipated.

Former Shell Oil President John Hofmeister told FOX Business Network’s Stuart Varney he expects to see similar moves in U.S. inventory data going forward.

“[Americans] love oil. We love gas. We’re a mobile society. And I’m not too worried about the so-called glut because we will eventually use it up,” he said.

He pointed to daily consumption figures worldwide standing at about 94 million barrels per day, with 18.5 million of those consumed in the U.S., while the nation imports seven million barrels daily. He said eventually the demand side of the equation will move back in line with production.

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